Pinochet's web of bank accounts exposed

The former Chilean dictator Augusto Pinochet and his family hid $15m (£7.8m) in more than 125 accounts at banks that included Citigroup, Riggs and the US arm of the Queen's bank, Coutts, a US Senate report said today.

General Pinochet, 89, whose regime killed and tortured thousands of people over 17 years, used the accounts to move funds from offshore holding companies to personal accounts in the US and to transfer cash to Chile, the Senate's permanent subcommittee on investigations found.

The panel said Gen Pinochet's use of US banks for his own financial gains extended far beyond his accounts at Riggs, the upmarket bank in Washington that has admitted to failing to report suspicious transactions and has paid a criminal fine.

As well as 63 accounts at Citigroup and 28 at Riggs, Gen Pinochet and his family had accounts at non-US banks with US operations. These included Banco de Chile, Espirito Santo Bank of Miami - a unit of Portugal's Banco Espirito Santo - and Coutts & Co (USA) International of Miami, the report said.

Once part of the international private banking unit of the Royal Bank of Scotland group, the Coutts unit was sold to Banco Santander Central Hispano in 2003.

Before 2004, the report said, "US regulators and law enforcement were generally unaware that Augusto Pinochet had constructed a web of largely hidden accounts in the US and was using these accounts on a regular basis to move funds and transact business."

Carl Levin, the top Democrat on the subcommittee, said: "Some banks actively helped him hide his funds; others failed to comply with US regulations requiring banks to know their customers."

Most of the Pinochet accounts at Citigroup, the world's largest financial services company, were handled by Citibank Private Bank, the report said. The Senate report found that Citigroup had helped the Pinochet family set up two offshore holding companies and provided family members with lines of credit in countries including Argentina, the Bahamas, Switzerland and the UK, as well as Chile.

Investigators said Citigroup opened the first Pinochet account in 1981 and continued to provide facilities for him and his family until last year, arranging wire transfers, establishing offshore entities, issuing credit cards and making loans.

Mr Levin said Riggs's efforts to help Pinochet had been in a class of their own, but he added that Citigroup had failed to conduct enough due diligence to determine the true identity of its customers and the sources of funds.

"We don't want to compare Citibank with Riggs," he said. "On the other hand, there was sloppiness and failure to know your customer, which they were supposed to do ... and we can't let them off the hook."

In a statement, Citigroup said: "Citibank accounts for Augusto Pinochet, which he opened with false documentation using pseudonyms, were shut down nearly a decade ago."

Citibank had begun closing remaining accounts in 1998 and the bank had since developed "industry-leading controls" to combat money laundering, it said.

In January, Riggs pleaded guilty to US money laundering charges and agreed to pay $8m to the victims of the Chilean dictatorship, which was cited by the US government for human rights violations.

Riggs admitted helping Gen Pinochet and the leaders of oil-rich Equatorial Guinea launder millions of dollars and agreed to pay a $16m fine.

Gen Pinochet led Chile after a 1973 military coup overthrew the country's president, Salvador Allende. He ruled until 1990 and remained head of the armed forces until 1998. More than 3,000 people were killed during Gen Pinochet's rule and about 28,000 were tortured, according to Chilean government commissions.

Dozens of human rights cases against Gen Pinochet are in Chile's courts but his defence team has kept him from trial so far. The general's reputation among his staunchest supporters has taken a beating since his secret bank accounts came to light during the current investigations into allegations of tax evasion, tax fraud and embezzlement.